Microsoft is no threat – Sage

Not yet, anyway

Microsoft's assault into the SME business apps market is no threat - yet - to Sage, as the UK accountancy software firm is selling to much smaller businesses than its alleged rival.

"The competitive landscape has not changed even though Microsoft entered our market two and a half years ago," Sage chief exec Paul Walker told the FT. He's been drumming home this message to shareholders and investments since 2001.

But for how much longer? Microsoft may not have pushed hard for the small businesses which account for the lion's share of Sage revenes. But this time will come - the company is already investing $2 billion a year on building up its SME sector presence.

Microsoft muscled into the SME accountancy software business with the acquisition of Great Plains Software in the US, and Navision, in Denmark. Last year, Sage tried to torpedo Microsoft's agreed $1.3 billion takeover of Navision, urging European regulators to veto the deal. Its call was rejected. Sage's Navision move shows what the company really thinks of the Microsoft threat.

Sage yesterday turned in interim pre-tax profits up 14 per cent to £74.3 million on revenues up four per cent to £281.1 million. The company noted stronger performance in US and the UK than in Europe. But there are signs that the continent is picking up too, it says. The interim statement is here. ®